There is a very good chance that the huge corporations that own the countryâs three largest supermarket chains â" many refer to them as âThe Big Threeâ â" will be only two corporations in a year, and one of them will probably be a lot bigger than it is now.

Few know how it will shake out, however, and itâs not known whether the proposed buyout of Safeway by Wall Street investment firm Cerberus Capital Management will affect consumers in the long run. The deal essentially joins two of the largest supermarket chains under one corporate owner, another sign of a changing retail landscape for the food industry.

Cerberus announced on March 6 that it has reached a deal to acquire Safeway, the countryâs second-largest traditional supermarket corporation and the owner of the Vons and Pavilions chains, for more than $9 billion. Cerberus closed the deal to purchase Supervalu, the Minnesota-based corporation that owns Albertsons and several other major chains, about 14 months ago.

That means that both the Vons and Albertsons chains, pending shareholder approval and, more importantly, approval from federal and possibly California regulators, could be owned by the same Wall Street investment firm. Safeway and Supervalu combined would be the second-largest traditional grocery chain, behind Ralphsâ and Food 4 Lessâ corporate parent Kroger.

The deal must be approved by the Federal Trade Commission, the federal agency that insures competition and protects the public from unfair and monopolistic practices in the sale of goods and services.

Mitch Katz, a spokesman for the FTC, acknowledged that the agency would be reviewing the terms of the merger, but that he could not comment on what he said will be a lengthy process.

Jamie Court, president and chairman of the board of Consumer Watchdog, a Santa Monica-based advocacy group, said he believes the FTC should block the merger, likening it to what would happen to competitiveness of the soft drink market if Coke and Pepsi were allowed to merge.

âAny time you combine two of the three dominant players in the market itâs going to mean that either service or price is going to suffer,â Court said. âI donât know what the FTC will say, but it does feel like thereâs no good news here for the consumer.â

Court added that statements the companies have said about âeconomies of scale,â a term that usually refers to being able to do things cheaper when done in larger numbers, were misleading and would not offer consumers any breaks in the long run. And, while the companies have said that no stores will be closed, Court said that could change.

âWill jobs be lost because of this?â Court asked.

The California attorney generalâs office also has jurisdiction to rule on whether or not a merger would violate antitrust provisions. Nick Pacilio, a spokesman for the office, could not confirm or deny whether an investigation is underway.

The proposed deal is reminiscent of another situation that involved merging supermarket chains that changed the landscape of the industry, especially in Inland Southern California.

In 1998, Albertsons, at the time a stand-alone corporation based in Idaho, purchased American Stores, which owned the Lucky chain. The FTC reviewed the deal and in June 1999 ordered Albertsons to sell 145 stores in California and two other states, ruling that the company would have many locations that were so close to each other that Albertsons would unfairly dominate grocery sales in those cities and neighborhoods.

One of the biggest beneficiaries of that order was Stater Bros., which purchased 43 former Albertsons and Lucky stores in that divestiture. It allowed the chain, which still has the most locations of any grocery in San Bernardino and Riverside counties, to expand its presence considerably in Los Angeles and Orange counties and open its first locations in San Diego County.

Jack Brown, chairman and CEO of Stater Bros., declined to discuss any plans he might have connected to the combination of Vons and Albertsons

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